Answer (D) is correct . Segregation of duties is a category of the control activities component of internal control. Segregating responsibilities for authorization, recording, and asset custody reduces an employee’s opportunity to perpetrate an error or fraud and subsequently conceal it in the normal course of his/her duties.
Answer (A) is incorrect because Accountants typically journalize entries and prepare financial statements.
Answer (B) is incorrect because Accountants may record both cash receipts and cash disbursements as long as they do not have custody of cash.
Answer (C) is incorrect because Management establishes internal control and ultimately has the responsibility to authorize transactions.
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